UK house prices rose again in February, in opposition to higher mortgage rates and rising inflation to the highest rise in cash terms since 1991.
The national housing price index climbed in February at an annual rate of 12.6 percent, compared with a record rise in January of 11.2 percent. The price of a typical UK home is now £ 29,162 more than a year ago – the biggest year-on-year increase recorded by the lender.
Robert Gardner, Nationwide’s chief economist, said a combination of “solid demand and a limited supply of homes on the market” kept upward pressure on prices, despite inflation reaching a 30-year high and pushing up borrowing costs.
“The continued flooding of the housing market is somewhat surprising, given the increasing pressure on household budgets as a result of rising inflation… The reduction in household income has led to a significant weakening of consumer confidence,” he said.
The rise in apartment prices since February was 1.7 percent.
The average home price in the UK is now £ 260,230 – rising by more than £ 44,000 since February 2020, before the onset of the plague.
Gardner said the uncertain economic outlook, especially with the war in Ukraine, further undermines confidence and the expected rise in inflation will cause house price growth to slow in the coming year.
“The availability of housing has already become more tense, in part because growth in housing prices has outpaced profit growth by a large margin since the epidemic broke out,” he said.
“The price of a typical home is now equal to 6.7 times the average profits, compared to 5.8 in 2019.”
UK house prices surge despite inflation woes Source link UK house prices surge despite inflation woes